As a Bible College student, I'm impressed. Mainly that it didn't become a big "let's bash religion thread".
Yes, The people were for the most part illiterate. So Jesus teaching in memorable aramaic ( a common practice....lot's of evidence for it) means his disciples would have remembered-he was a good teacher who taught in pretty visual stories. Not necessarily on topic, but Richard Bauckham of the University of St. Andrews Scotland wrote a book called "Jesus and the Eyewitnesses". Basically, it's the most recent and compelling evidence that the writers of the Gospels were eyewitnesses to the events they describe: http://www.amazon.com/Jesus-Eyewitnesses-Gospels-Eyewitness-Testimony/dp/0802831621
There is a quite a bit of scholarship that suggests that the Gospels were written by eyewitnesses, and that the entire New Testament was completed before 70 AD (hence no mention of the destruction of the Temple and the sacking of Jerusalem by Nero). If you are interested there is a pretty lengthy book on the subject.
If you're going to read Ehrman, which I definitely encourage you to do, balance it out by reading some Bauckham, specifically Jesus and the Eyewitnesses and The Testimony of the Beloved Apostle. Not quite as aimed at a popular readership as Ehrman's stuff, but very good nonetheless. Bauckham argues that the gospels are based on eyewitness accounts. They're not eyewitness accounts themselves, but based on accounts handed down. Someone mentioned the intro to Luke:
> Many have undertaken to draw up an account of the things that have been fulfilleda among us, just as they were handed down to us by those who from the first were eyewitnesses and servants of the word. Therefore, since I myself have carefully investigated everything from the beginning, it seemed good also to me to write an orderly account for you, most excellent Theophilus, so that you may know the certainty of the things you have been taught.
That seems to suggest that the gospel writers, or at least Luke (though the evidence suggests that Matthew did the same - look up "synoptic problem"), referred to eyewitness accounts. But don't just take the Bible's word for it - check out Bauckham, an excellent scholar and a very nice man.